Zoetis (ZTS) Cut to Hold at Zacks Investment Research

Zacks Investment Research lowered shares of Zoetis (NYSE:ZTS) from a buy rating to a hold rating in a report issued on Sunday morning.

According to Zacks, “Zoetis continues to maintain momentum on the back of growth from new parasiticide products (Simparicaand Stronghold Plus), vaccines, strong dermatology portfolio and the addition of the Abaxis diagnostics portfolio. The company’s companion animal business has been performing well. The Abaxis acquisition has strengthed the company’s presence in the animal health diagnostics market, a fast-growing portion of the animal health industry which should further boost sales. Moreover, Zoetis five-year collaboration agreement with Regeneron to research the use of latter’s monoclonal antibody therapeutics in animals and discover new veterinary treatments will further diversify the broad portfolio. Shares of Zoetis have outperformed the industry in the last twelve months. However, Zoetis faces stiff competition from companies like Merck Animal Health.”

A number of other equities analysts also recently commented on the company. JPMorgan Chase & Co. upgraded Zoetis from a neutral rating to an overweight rating and set a $100.00 price target for the company in a research note on Monday, October 15th. Cantor Fitzgerald reiterated a buy rating and issued a $98.00 price target on shares of Zoetis in a research note on Monday, October 1st. Morgan Stanley set a $100.00 price target on Zoetis and gave the stock a hold rating in a research note on Friday, November 2nd. BMO Capital Markets lifted their price target on Zoetis to $93.00 and gave the stock a neutral rating in a research note on Monday, November 12th. They noted that the move was a valuation call. Finally, Argus set a $105.00 target price on Zoetis and gave the company a buy rating in a research note on Tuesday, November 13th. Seven research analysts have rated the stock with a hold rating and eleven have assigned a buy rating to the company’s stock. Zoetis currently has an average rating of Buy and a consensus target price of $94.00.

NYSE:ZTS opened at $86.54 on Friday. The stock has a market capitalization of $40.72 billion, a P/E ratio of 36.06, a PEG ratio of 1.50 and a beta of 1.01. Zoetis has a one year low of $70.20 and a one year high of $96.57. The company has a debt-to-equity ratio of 3.04, a current ratio of 4.06 and a quick ratio of 2.63.

Zoetis (NYSE:ZTS) last posted its quarterly earnings results on Thursday, November 1st. The company reported $0.83 EPS for the quarter, topping the Zacks’ consensus estimate of $0.77 by $0.06. The business had revenue of $1.48 billion during the quarter, compared to the consensus estimate of $1.46 billion. Zoetis had a return on equity of 75.51% and a net margin of 20.35%. The company’s revenue for the quarter was up 9.9% compared to the same quarter last year. During the same period last year, the firm earned $0.65 earnings per share. On average, analysts predict that Zoetis will post 3.11 EPS for the current year.

Zoetis declared that its Board of Directors has approved a share buyback plan on Wednesday, December 12th that authorizes the company to repurchase $2.00 billion in shares. This repurchase authorization authorizes the company to purchase up to 4.7% of its stock through open market purchases. Stock repurchase plans are typically an indication that the company’s leadership believes its stock is undervalued.

The business also recently announced a quarterly dividend, which will be paid on Friday, March 1st. Shareholders of record on Friday, January 18th will be paid a $0.164 dividend. This is an increase from Zoetis’s previous quarterly dividend of $0.13. This represents a $0.66 dividend on an annualized basis and a yield of 0.76%. The ex-dividend date of this dividend is Thursday, January 17th. Zoetis’s payout ratio is presently 20.83%.

In other news, insider Roxanne Lagano sold 2,000 shares of Zoetis stock in a transaction that occurred on Monday, December 31st. The stock was sold at an average price of $85.30, for a total transaction of $170,600.00. The transaction was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Also, CEO Juan Ramon Alaix sold 150,306 shares of Zoetis stock in a transaction that occurred on Thursday, November 8th. The shares were sold at an average price of $94.96, for a total value of $14,273,057.76. Following the sale, the chief executive officer now directly owns 246,319 shares in the company, valued at approximately $23,390,452.24. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 171,511 shares of company stock valued at $16,238,439. 0.35% of the stock is currently owned by insiders.

Several institutional investors and hedge funds have recently added to or reduced their stakes in ZTS. Marshall Wace LLP raised its holdings in shares of Zoetis by 76.4% during the third quarter. Marshall Wace LLP now owns 3,216,573 shares of the company’s stock valued at $294,509,000 after buying an additional 1,393,397 shares during the last quarter. Renaissance Technologies LLC raised its holdings in shares of Zoetis by 206.5% during the third quarter. Renaissance Technologies LLC now owns 2,062,100 shares of the company’s stock valued at $188,806,000 after buying an additional 1,389,300 shares during the last quarter. Marshall Wace North America L.P. raised its holdings in shares of Zoetis by 32.6% during the third quarter. Marshall Wace North America L.P. now owns 4,202,241 shares of the company’s stock valued at $384,757,000 after buying an additional 1,034,161 shares during the last quarter. Deutsche Bank AG raised its holdings in shares of Zoetis by 55.5% during the third quarter. Deutsche Bank AG now owns 2,677,762 shares of the company’s stock valued at $245,169,000 after buying an additional 955,954 shares during the last quarter. Finally, AQR Capital Management LLC raised its holdings in shares of Zoetis by 51.9% during the third quarter. AQR Capital Management LLC now owns 2,629,436 shares of the company’s stock valued at $240,751,000 after buying an additional 898,015 shares during the last quarter. 89.86% of the stock is currently owned by institutional investors.

About Zoetis

Zoetis Inc discovers, develops, manufactures, and markets veterinary vaccines and medicines in the United States and internationally. It commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep; and companion animals comprising dogs, cats, and horses.

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